Thursday, August 11, 2011

Who are you going to listen to?

The debate on the causes, nature and solutions to our economic woes has been ongoing for years, and one side is is plainly wrong. Its not long term government debt projections that we need to worry about, or inflation, or the god damned stupid debt ceiling. Its low aggregate demand and high unemployment, private household debt and deficient federal revenue. This is plain as day to anyone smart who's looking at the data with an unbiased eye and a clear understanding of economics. I am not one of those people, but I know who they are and i know how to listen to the smart people making the logical arguments supported by the data. So lets take a look at 3 people and what they're saying:
1) Bill Gross, probably the most famous and one of the most successful bond investors in the world
2) Warren Buffet, probably the most famous and one of the most successful businessmen in the world and
3) Joseph Stiglitz, nobel prize winner and one of the most famous economists in the world

Gross - "Fiscally, however, an anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking. Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not.

The president and Congress must recognize that an AA-plus country, to remain AA-plus, must focus on growth, not debt reduction, in the short term. We have a debt problem — but primarily a crisis of aggregate demand. A 21st-century Keynes would have recognized this and sounded the alarm, pointing out that policymakers from a fiscal perspective are pointing us toward recession and the destructive 1930s instead of a low-growth but still breathing U.S. economy of the 21st century."

Buffet - " We raised the debt ceiling seven times during the Bush Administration," Buffett told CNBC on Thursday. Now, the Republican-controlled Congress is "trying to use the incentive now that we're going to blow your brains out, America, in terms of your debt worthiness over time....We had debt at 120 percent of the GDP, far higher than this, after World War II and no one went around threatening that we're going to ruin the credit of the United States or something in order to get a better balance of debt to GDP"..... We shouldn't be playing Russian Roulette with the debt ceiling....I would go after the very rich.....Removing stimulus too fast could be a negative

Stiglitz - "austerity is not only a recipe for pain now, but for more pain in years to come." And we should 1) repeal Bush tax cuts for the rich 2) End the wars 3) Use further stimulus including poublic works programs and 4) reform medicare part d to allow the government to negotiate drug prices.;_ylt=ApgO0_piB5btWZ4ROVmAPoC7YWsA;_ylu=X3oDMTE2YTVyYTF1BHBvcwMxMgRzZWMDdG9wU3RvcmllcwRzbGsDam9zZXBoc3RpZ2xp?sec=topStories&pos=9&asset=&ccode=

So to all the tea partiers, the republican congress and the various and sundry republican presidential cadidates, I'll stick with these guys for advice, thanks. You can stick to looking for Obama's birth certificate and fighting against the myths of evolution and global warming.

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